Refer to the graph shown. If the market price is P2, the firm will produce:
A. Q3 and break even.
B. Q3 and earn a profit.
C. Q4 and incur a loss.
D. Q2 and incur a loss.
Answer: A
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Technological advancements that increase labor's productivity shift the labor supply curve to the right
Indicate whether the statement is true or false
Based on our understanding of the model presented in Chapter 3, we know that a reduction in c1 (where C = c0 + c1YD) will cause
A) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a smaller effect on output. B) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a larger effect on output. C) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a smaller effect on output. D) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a larger effect on output.
If the demand of U.S. dollars drops sharply
A. the dollar will depreciate in value. B. foreigners holding U.S. assets will suffer tremendous losses. C. Americans will have to pay a lot more for imported goods. D. All of the choices are true.
Refer to the information provided in Figure 9.1 below to answer the question(s) that follow. 
Figure 9.1Refer to Figure 9.1. If this farmer maximizes profits, his average fixed costs will be
A. $2. B. $7. C. $11. D. $24.